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Steel Exchange India Ltd.

BSE: 534748 Sector: Others
NSE: STEELXIND ISIN Code: INE503B01013
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OPEN 87.90
PREVIOUS CLOSE 84.20
VOLUME 58309
52-Week high 100.90
52-Week low 45.50
P/E
Mkt Cap.(Rs cr) 641
Buy Price 84.30
Buy Qty 43.00
Sell Price 0.00
Sell Qty 0.00
OPEN 87.90
CLOSE 84.20
VOLUME 58309
52-Week high 100.90
52-Week low 45.50
P/E
Mkt Cap.(Rs cr) 641
Buy Price 84.30
Buy Qty 43.00
Sell Price 0.00
Sell Qty 0.00

Steel Exchange India Ltd. (STEELXIND) - Director Report

Company director report

To the Members

Your Directors have pleasure in presenting the 17th Annual Report and the AuditedFinancial Statements for the Financial Year ended March 31 2016.

FINANCIAL RESULTS:

The performance for the Financial Year ended March 31 2016 is as under: The financialsummary

(Rs. in Lakhs)

PARTICULARS 31-Mar-16 31-Mar-15
Total Revenue 168206.99 157763.26
Profit before finance cost depreciation and tax expense 16294.68 18741.20
Finance cost 12272.78 12762.91
Profit before depreciation and tax expense 4021.90 5978.29
Depreciation 2654.44 2501.81
Profit before tax expense 1367.46 3476.48
Tax expense 628.39 630.82
Net Profit for the year 739.07 2845.66

State of the Company's Affairs :

During the year under review the total revenue of the company was Rs. 1682.06 croresas against previous figure Rs.1577.63 crores which is 6.62 % more than the last year andProfit before depreciation and taxes recorded at Rs.40.21 crores as against previousfigure Rs. 59.78 crores.

The manufacturing sales were Rs.794.14 Crores in the current year and Rs.755.99 Croresin the previous year. The trading sales during the year amounted to Rs. 922.11 Crorescompared to Rs. 816.83 Croresin the previous year.

The increase in revenues would have been higher but for the substantial reduction inprices in the 3rd quarter both in domestic markets and world over. Revenue from powersales was also lower in the 4th quarter due to reduced off take by state governmentutilities.

Listing of Equity Shares

The Company's Equity shares are listed at the Bombay Stock Exchange Limited (BSE)PhirozeJeeJeebhoy Towers Dalal Street Mumbai-400 001 having nationwide tradingterminals.

The Company has paid the Annual Listing Fees to the said Stock Exchange for thefinancial year 2016-17.

The Company has made an application for listing of equity shares on National StockExchange of India Limited (NSE) and is yet to obtain the approval from NSE.

The Board of Directors of the Company has approved for voluntary delisting of equityshares from Calcutta Stock Exchange Limited (CSE) and the process is observed fordelisting of equity shares from CSE in accordance with SEBI (Delisting of Equity Shares)Regulation 2009.

Performance and financial position of each of the subsidiaries associates and jointventure

Your Company does not have any Subsidiary Joint Venture or Associate Companies.

Number of Meetings of the Board of Directors

During the year ended March 31 2016 Seven Board Meetings were held.

The dates on which the Board meetings were held are May 09 2015 August 12 2015August 28 2015 September 11 2015 November 14 2015 February 10 2016 and February 292016.

Details of number of Meetings attended by each Director have been given in thecorporate governance report which forms part of this Annual Report.

Directors Responsibility Statement as required under Section 134 of the Companies Act2013

Pursuant to the requirement under Section 134 of the Companies Act 2013 with respectto the Directors' Responsibility Statement the Board of Directors of the Company herebyconfirms:

i) that in the preparation of the Annual Accounts the applicable accounting standardshave been followed;

ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2016 andof Profit and Loss Account of the Company for that period;

iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the Directors have prepared the Annual Accounts for the Financial Year endedMarch 31 2016 on a going concern basis;

v) that the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

vi) That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Statement on Declaration given by Independent Directors under Sub-Section (6) ofSection 149

The independent directors have submitted the declaration of independence as requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in sub-section(6).

Particulars of Loans Guarantees or Investments under Section 186

Pursuant to Section-186 of the Companies Act 2013 and Schedule V of the SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 ("ListingRegulations") the Company neither has directly nor indirectly given any loan to itsDirectors nor extended any guarantee or provide any security in connection with any loantaken by them. Further the company has neither given any inter-corporate loan/advance notmade any investments in other companies during the financial year 2015-16.

Particulars of Contracts or Arrangements with Related Parties Referred to inSub-Section (1) of Section 188

The particulars of contracts or arrangements with related parties referred to insub-section (1) of Section 188 are prepared in Form No. AOC-2 pursuant to clause (h) ofsub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules2014 and the same is enclosed as Annexure - 1 to this Report.

Transfer of Amount to Reserves

The Company doesn't propose to transfer any amount to the general reserve for theFinancial Year ended 31st March 2016.

Dividend

The Board of Directors of the Company could not recommend Dividend for the financialyear ended March 31 2016.

Share Capital

Authorized Share Capital: There was no change in the authorized share capital of theCompany during the year under review.

Paid up Share Capital:

5982720 equity shares of Rs.10/- each were allotted to the shareholders of GSAL(India) Ltd. on May 9 2015 as per the terms of amalgamation.

18052092 Equity Shares of Rs. 10/- each and 18608750 10.5% Non-convertibleRedeemable Preference Shares of Rs. 10/- each were allotted to the shareholders ofSimhadri Power Limited on January 27 2016 as per the terms of amalgamation with theCompany.

As a result the issued subscribed and paid up share capital of the Company increasedto Rs. 945935620/- comprising of 75984812 equity shares of Rs. 10/- each and18608750 10.5% Non-Convertible Redeemable Preference Shares of Rs. 10/- each.

Listing Permissions and Trading Approvals for all equity shares allotted during theyear have been obtained and traded on Bombay Stock Exchange.

The Company has not issued any shares with differential rights and hence no informationas per the provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.

Deposits

The Company has not accepted any deposits from the public and as such no amount onaccount of principal or interest on deposits from public was outstanding as on the date ofthe balance sheet in terms of Section 73 of the Companies Act 2013.

Extracts of Annual Return

The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of Companies (Management and Administration) Rules 2014and the same is enclosed as Annexure - 2 to this Report.

The conservation of energy technology absorption foreign exchange earnings and outgopursuant to provisions of Section 134(3)(m) of the Companies Act 2013 (Act) read with theCompanies (Accounts) Rules 2014.

Information with respect to conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies(Accounts) Rules 2014 is prepared and the same is enclosed as Annexure-3 to thisReport.

Risk Management Committee

The Board of Directors has formed a risk management committee to identify evaluatemitigate and monitor the risk associated with the business carried by the company. Thecommittee reviews the risk management plan and ensures its effectiveness. A mechanism hasbeen put in place which will be reviewed on regular intervals.

Corporate Social Responsibility Committee

Corporate Social Responsibility is commitment of the Company to improve the quality oflife of the workforce and their families and also the community and society at large. TheCompany believes in undertaking business in such a way that it leads to overalldevelopment of all stakeholders and Society. Company has been pursuing CSR activities longbefore they were made mandatory under the Companies Act 2013. A report on CorporateSocial Responsibility (CSR) Policy and Activities as per Rule 8 of the Companies(Corporate Social Responsibility Policy) Rules 2014 is appended with this report as Annexure-4and link to the CSR policy is available at the website http://seil.co.in.

Committees of the Board:

The Board has Audit Committee Nomination and Remuneration Committee Stakeholder'sRelationship Committee and Corporate Social Responsibility Committee. The details ofthethese committees have been given in the Corporate Governance Report forming part of theAnnual Report.

Corporate Governance

A separate report on Corporate Governance is annexed as part of the Annual Report alongwith the Auditor's Certificate on its compliance.

Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review as stipulatedunder Listing Regulations is annexed herewith which forms part of this report.

Whistle Blower Policy and Mechanism

The Board of Directors has adopted Whistle Blower Policy. The Whistle Blower Policyaims for conducting the affairs in a fair and transparent manner by adopting higheststandards of professionalism honesty integrity and ethical behavior. All permanentemployees of the Company are covered under the Whistle Blower Policy.

A mechanism has been established for employees to report concerns about unethicalbehavior actual or suspected fraud or violation of Code of Conduct and Ethics. It alsoprovides for adequate safeguards against the victimization of employees who avail of themechanism and allows direct access to the Chairperson of the audit committee inexceptional cases.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015. The performance of the Board was evaluated bythe board after seeking inputs from all the directors on the basis of the criteria such asthe board composition and structure effectiveness of the board processes in formationand functioning etc. In a separate meeting of independent directors performance ofnon-independent directors performance of the Board as a whole and performance of theChairman was evaluated taking into account the views of executive directors andnon-executive directors. The same was discussed in the board meeting that followed themeeting of the independent directors at which the performance of the board its committeesand individual directors was also discussed. Performance evaluation of independentdirectors was done by the entire board excluding the independent director beingevaluated.

Directors

Mr. Bavineni Suresh and Mr. Veeramachaneni Venkata Krishna Rao Directors of theCompany retire by rotation and being eligible offer themselves for re-appointment.

The office of Mr. B. Satish Kumar was completed on 29th February 2016 as the ManagingDirector for a period of three years and Mr. B. Satish Kumar was re-appointed as Managingdirector w.e.f 01.03.2016 for a period of three years as recommended by the Nomination andRemuneration Committee.

Details of Directors or Key Managerial Personnel Who were appointed or have resignedduring the Year

Shri. B. Satish Kumar (DIN: 00163676) was reappointed as Managing Director of theCompany for a further period of three years with effect from 01st March 2016 pursuant tothe provisions of Sections 196 197 and 203 read with Schedule V and all other applicableprovisions of the Companies Act 2013 and the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

Mr. B. Narahari Company Secretary resigned as Company Secretary of the Company w.e.f.March 01 2016.

Mr. L. Babu Are Company Secretary was appointed as Company Secretary of the Companyw.e.f. May 02 2016 pursuant to provisions of Section 203 of the Companies Act 2013.

Policy on Directors' Appointment and Remuneration

A gist of policy of the Company on Directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available in the Corporate Governance Report.

The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178 (3) of the Act have been disclosed in the corporate governancereport. Under Section 178 (3) of the Companies Act 2013 the Nomination and RemunerationCommittee of the Board has adopted a policy for nomination remuneration and other relatedmatters for directors and senior management personnel.

Statutory Auditors

At the Annual General Meeting held on December 31st 2014 M/s. Pavuluri & CoChartered Accountants (Firm Registration No. 012194S) Hyderabad were appointed asStatutory Auditors of the Company to hold office for a period of Five years i.e. till theconclusion of the Annual General Meeting to be held in the calendar year 2019.

In terms of the first proviso to Section 139 of the Companies Act 2013 theappointment of the auditors shall be placed for ratification at every Annual GeneralMeeting. Accordingly the said appointment of M/s. Pavuluri& Co Chartered Accountants(Firm Registration No. 012194S) Hyderabad as statutory auditors of the Company is placedfor ratification by the Shareholders.

As required under section 139 of the Companies Act 2013 the Company has obtainedwritten consent from M/s. Pavuluri & Co Chartered Accountants (Firm Registration No.012194S) Hyderabad to such appointment and also a certificate from the auditors to theeffect that if their appointment is ratified it would be in accordance with theprovisions of Section 139(1) of the Act and the rules made there under.

The Board of Directors and the Committee thereof recommended the appointment and theresolution forms part of the agenda at the ensuing Annual General Meeting.The Auditorshave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India.

The Statutory Auditor's Report does not contain any qualifications reservation oradverse remarks. This report forms part of the Annual Report.

Cost Auditors:

The Products classified as "Steel and Electricity" manufactured by theCompany are subject to Cost Audit in terms of Sec. 148 of the Companies Act 2013 read withthe rules issued there under by the Central Government.

Accordingly M/s. DZR & Co. Cost Accountants have been re-appointed as the CostAuditors for the year ending 31st March 2017.

The Cost Audit Report for year ended 31st March 2015 was reviewed by the AuditCommittee at its meeting held on September 11 2015 and has been filed on November 232015.

Internal Auditors

The Board of Directors of the Company has appointed M/s Bhavani & Co CharteredAccountants to conduct Internal Audit of the Company for the Financial Year ended 31stMarch 2016.

Secretarial Auditor's Report

As per the provisions of Section 204 of the Companies Act 2013 the Board of Directorshave appointed BSS & AssociatesCompany Secretaries as Secretarial Auditors to conductSecretarial audit of the company for the Financial year ended on March 31 2016.

Secretarial Audit Report issued by Mr. S. Srikanth Partner of M/s BSS &Associates Company Secretaries in form MR-3 is enclosed as Annexure - 5 to thisAnnual Report.

There are no qualifications in Secretarial Audit Report.

Statement of particulars of appointment and remuneration of managerial personnel

The ratio of remuneration of each director to the median of employee's remuneration asper Section 197(12) of the Companies Act 2013 read with Rule 5 of Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is enclosed as Annexure - 6to this Annual Report.

Insurance

All properties and insurable interests of the Company including building plant andmachinery and stocks have been fully insured.

Details in respect of adequacy of internal financial controls with reference to theFinancial Statements

1. The Company has set internal control systems to maintain accurate and completeaccounting records to safeguard its assets to prevent and detect any frauds and errors.

2. The Company has appointed Internal Auditors to observe the Internal Controls andwhether the work flows of organization are being done through the approved policies of theCompany. In every Quarter during the approval of Financial Statements Internal Auditorswill present the Internal Audit Report and Management Comments on the Internal Auditobservations; and

The companies which have become or ceased to be Company's Subsidiaries joint venturesor associate companies during the year are: Nil Change in the nature of business

There is no change in the nature of business of the Company.

The details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future.

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future

Material changes and commitments

There are no Material changes and commitments in the business operations of the Companyfrom the financial year ended 31st March 2016 to the date of signing of the Director'sReport.

Policy on Sexual Harassment

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.

During the financial year ended 31st March 2016 the Company has not received anyComplaints pertaining to Sexual Harassment.

Industrial Relations and Human Resources

Your company believes that its employees are one of the most valuable assets of theCompany and the Board appreciates the employees across the cadres for their dedicatedservice to the company and expects their continuous support and higher level ofproductivity for achieving the targets set for the company. During the year under reviewthe company organized various training programmes at all levels to enhance skills ofemployees. The total employee strength is over 1420 as on 31st March 2016.

Acknowledgement

The Directors take this opportunity to place on record their sincere thanks to theBanks and Financial Institutions Insurance Companies Central and State GovernmentDepartments and the shareholders for their support and co-operation extended to theCompany from time to time. Directors are pleased to record their appreciation of thededicated services of the employees and workmen at all levels.

For and on behalf of the Board of Directors
Place: Hyderabad B. SATISH KUMAR
Date: 31.08.2016 Chairman & Managing Director
(DIN: 00163676)

Annexure - 1

Disclosure of Particulars of Contracts/Arrangements entered into by the Company

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Disclosure of particulars of contracts/arrangements entered into by the company withrelated parties referred to in subsection (1) of section 188 of the Companies Act 2013including certain arms length transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm's length basis

There were no contracts/arrangements entered into by the company with related partiesreferred to in sub-section (1) of section 188 of the Companies Act 2013 during the yearended March 31 2016 which are not at arm's length basis.

2. Details of material contracts or arrangement or transactions at arm's length basis

There were no contracts/arrangements entered into by the company with related partiesreferred to in sub-section (1) of section 188 of the Companies Act 2013 during the yearended March 31 2016 which were at arm's length basis.

For and on behalf of the Board of Directors
Place: Hyderabad B. SATISH KUMAR
Date: 31.08.2016 Chairman & Managing Director
(DIN: 00163676)